Britain to fund South African carbon trading experiment

Mon Jul 14, 2014 1:15pm GMT
 

(Reuters) - Britain will expand funding for a programme to help coal-rich South Africa develop a carbon trading market in an attempt to rein in its rising greenhouse gas emissions.

The British High Commission in Pretoria last week said it will fund a pilot emissions trading programme from next year to help companies prepare for a 120-rand-per-tonne ($11.21) carbon tax that is expected to come into force in 2016.

The value of the grant was not disclosed.

The launch of South African's carbon tax, which would apply to major emitters including steel giant ArcelorMittal, utility Eskom [ESCJ.UL] and petrochemical group Sasol, was delayed by one year to allow more time for planning and consultation with stakeholders.

The South African government earlier this year said major emitters will be allowed to use carbon offsets, which could be generated by investment in domestic or possibly regional clean energy sources, to help meet their tax obligations.

The British High Commission's grant, awarded through its Prosperity Fund, will for a second time go to Johannesburg-based Promethium Carbon.

"Funding from the Prosperity Fund will assist to fast track the development of a local carbon trading system in preparation for the carbon tax," said Robbie Louw, a director at Promethium.

Promethium was first selected by the Commission to carry out a 2013 preliminary study as to whether a carbon offset market could complement the tax and help ease costs for industry.

Promethium said the first phase of the study found such a market could function, so a second phase, expected to conclude next February, will focus on how to start trade and on launching a pilot market on the Johannesburg Stock Exchange from 2015.   Continued...

Electricity pylons in Johannesburg's Alexandra township stand against the skyline of the city's Sandton business district in this May 25, 2008 file photo.  REUTERS/Mike Hutchings/Files
 
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